The HR Experiment That Went Wrong

Bolt’s former CEO Ryan Breslow proudly disavowed the company’s HR department at Fortune’s Workforce Innovation Summit this week, claiming that his company was better off without human resources management. This assertion has sparked alarm and curiosity among observers.

The decision to scrap the HR team is a stark reminder of the seismic shift underway in the business world. As companies adapt to rapid technological change, they are questioning the relevance of traditional HR functions. Breslow’s own experience at Bolt provides a useful case study: after a valuation plummeted from $11 billion to around $300 million, he made deep cuts, including eliminating his HR team and thousands of other employees.

Bolt now operates on a “wartime” footing with just over 100 people. On the surface, this might seem like a textbook example of how to thrive in the AI age: shed unnecessary costs, streamline operations, and focus on what really matters. However, experts argue that Breslow’s approach is misguided.

Himanshu Palsule, CEO of Cornerstone OnDemand, disagrees vehemently. His company has launched an innovative platform using AI to assess, train, and mobilize employees. “People will enable agents to take over the enterprise,” Palsule said at a customer event in New York. “If you lose your people, those agents aren’t doing anything in your company – they’re just creating chaos.”

As companies continue to grapple with AI and human resources, one thing becomes clear: management strategies must adapt to keep pace with technological advancements. Gen Z is proving to be the most skilled generation yet when it comes to navigating the digital landscape.

Palsule warns that we are leaving out this generation at our own peril. “We have to make room for that generation if we want AI to thrive within a company,” he emphasized, noting that this means investing in their development and recognizing the value they bring to the table.

The shift towards automation has led to a reevaluation of what it means to be a knowledge worker in the modern era. With tasks increasingly being automated, employees must develop new skills that complement AI capabilities rather than simply replicating them. As Palsule noted, “Your ability to build products, use judgment, use inference, use delight in how you bring it to market – that is never going to go away.”

The leadership challenge of the AI era is twofold: companies must adapt their management strategies while preparing employees for a rapidly changing work environment. As Palsule emphasized, “Be very clear and set board expectations on what success looks like – and sometimes educate them on what the challenges are going to be.”

Ultimately, the Bolt experiment serves as a cautionary tale about relying too heavily on technology and neglecting human capital in the process. While AI has the potential to revolutionize business operations, it is only one piece of the puzzle. Companies that prioritize people management will ultimately be better equipped to navigate the complexities of the AI age.

The hard truth is that some companies will fail to adapt, and when they do, their employees will bear the brunt of the consequences. But for those willing to learn from the mistakes of others, there’s still time to course-correct and build a future where human resources and AI coexist in harmony – not as mutually exclusive entities but as complementary forces that propel business forward.